A pay increase of €1,000 for public sector workers has been brought forward to April in a move Public Expenditure Minister Paschal Donohoe hopes will halt industrial action in 2017.

The payment was due to come into effect in September, but has been brought forward to appease the demands of the Irish Congress of Trade Unions, following the €50million pay deal given to Gardai.

The new deal has been agreed upon with the Irish Congress of Trade Unions.

It will see almost 250,000 public sector workers pocket an extra €400 a year and will cost the exchequer €128m, which Mr Donohoe has claimed will come from “savings and efficiencies” across all Government departments.

The increase will apply only to those earning less than €65,000 a year, who are within the Lansdowne Road Agreement. Gardai, who recently received an additional €4,000 a year on foot of a Labour Court recommendation, will not benefit from the deal.

Minister for Public Expenditure Paschal Donohoe looking at Budget 2017

Minister Donohoe said: “With the many challenges that we face abroad, that will be crystalised and highlighted today, it is vital that a small, open economy has the ability to plan its public expenditure.

“We cannot do that without the ability to plan public pay into this year, next year and the years after that.

“The disintegration of the Lansdowne Road Agreement, or the inability of Government to secure an affordable replacement to the Lansdowne Road Agreement, would pose a grave challenge to our ability to manage public pay, and therefore to our ability to manage public expenditure.”

He added: “This additional payment has been offered by Government on the understanding that there will be continued adherence to the terms of the Lansdowne Road Agreement and in particular, its mechanisms to resolve disagreements before they escalate into industrial disputes over the remaining period of the agreement.

“The requirement therefore, to adhere to industrial peace, will be fully observed in all sectors.”

Mr Donohoe denied accusations he had “capitulated” to the union’s demands, and said he would strive to ensure the deal does not impact the delivery of services.

He said: “ If you look at the ways in which I and the Government have managed public expenditure across 2016 in particular, there is a 1% difference between how the Government expected our expenditure to land in December 2015 versus how it landed at the end of 2016.

“I will work across this year to ensure we can deal with this figure without jeopardising the service agreements we have.”

However, Labour Leader Brendan Howlin, the Minister for Public Expenditure Minister during the last Government, said he didn’t believe it the additional cost could be made up from savings.

The pay rise will also not apply to members of the Association of Secondary Teachers Ireland which is currently outside of the Lansdowne Road agreement.

Elsewhere, the INMO have recently voted in favour of industrial action, on the basis of not just pay, but also the quality of services in the industry.

However, Mr Donohoe said he now expects the INMO to adhere to the agreement made with the ICTU.

He said: “My expectation is that the text that we have now agreed with the Public Services Committee and ICTU, that the INMO are members of, will now be used to deal with issues that they are referring to.”